After issuing a tentative ruling Monday, San Mateo County Superior Court Judge Steven Dylina issued his final decision Tuesday, said Mike Danko, an attorney for one of the plaintiffs.

More than 350 people have filed civil suits against PG&E over the Sept. 9, 2010, blast, which killed eight and destroyed 38 homes after one of the utility's pipelines ruptured.

Relatives who lost family members and property have been seeking punitive damages, as well as millions of dollars in compensation.

Attorneys for the victims have argued that PG&E did not do enough to determine if the pipeline had defective welds and put profit over safety.

PG&E has taken responsibility for the blast, but had wanted to avoid paying punitive damages, claiming in court filings that explosion was an accident, not due to mismanagement.

"Our priority has been and continues to be resolving these claims as quickly and fairly as possible and helping the victims find closure to this tragedy," PG&E spokeswoman Brittany Chord, said in response to the ruling.

The trial is set to begin in January, and the jury will be able to determine the amount of punitive damages.

In August, PG&E CEO Anthony Early said the total cost related to San Bruno blast would likely top $1 billion, including money the company has spent on repairs stemming from the blast, paid to victims and PG&E's estimate of a $200 million fine from regulators.